In a bold move aimed at addressing Spain's escalating housing crisis, President Pedro Sánchez unveiled a sweeping package of reforms on Monday.

These reforms are strategically focused on three main objectives: expanding the housing stock, enhancing regulatory frameworks, and increasing support for socio-economic groups hit hardest by the current crisis.

As part of these efforts, the Spanish government has initiated the transfer of over 3,300 residences alongside nearly two million square meters of residential land to a newly formed Public Housing Company.

This transfer is aimed at building affordable rental housing primarily for young citizens.

Additionally, 13,000 homes from the Sociedad de Gestión de Activos Procedentes de la Reestructuración Bancaria (SAREB) will be incorporated by mid-2025, with a further 17,000 slated for gradual integration thereafter.

This newly established Public Housing Company will possess priority rights to purchase homes and land, although its authority will be secondary to regional rights.

To solidify the government’s commitment to public housing, a new legal framework will ensure that all state-built housing remains under public ownership indefinitely.

Furthermore, the government has announced a new Strategic Projects for Economic Recovery and Transformation (PERTE) initiative focused on the innovation and modernization of industrialized and modular construction in Spain.

This initiative, to be initially rolled out in Valencia, aims to foster quicker, cost-effective, and environmentally sustainable construction.

A pivotal element of the reforms is the creation of a public guarantees system.

This system, designed to mobilize vacant homes for affordable renting, will safeguard rent payments for landlords while offering tenants broader access to affordable, equitable housing.

Set to launch this year, it particularly targets landlords renting to individuals under 35, and mirrors successful models in place in France.

Complementing these efforts, the government has put forward a program for renovating vacant properties to make them available for affordable rent, incentivizing owners with financial aids for refurbishments in exchange for a five-year affordable rental commitment.

A fiscal proposal aims to grant a 100% Personal Income Tax exemption for landlords who offer rentals based on the Housing Ministry's Reference Price Index, indiscriminately of their locale's status as a high-demand area.

On the regulatory front, the government plans to classify tourist housing as a business, taxing them accordingly as an economic activity and applying VAT in areas facing housing access challenges or tourist saturation.

Tax advantages for SOCIMIs (Sociedades Anónimas Cotizadas de Inversión en el Mercado Inmobiliario) will be contingent upon promoting affordable rental properties.

Measures will also increase taxes on non-resident non-EU foreigners purchasing homes in Spain to ensure residential real estate is more available for domestic residents.

Additionally, the government will intensify regulations against seasonal rental fraud and set up funds to aid regional and local governments in reinforcing inspections of illegal tourist accommodations and fraudulent housing uses.

A new national housing plan slated for introduction in 2026 will further extend current support programs for rental and first-time home purchases, with particular focus on senior citizens, youth, disabled individuals, and those residing in high-demand areas.

With these comprehensive initiatives, the Spanish government is poised to tackle the complex challenges of its housing market, underscoring a concerted effort to provide stable, affordable housing solutions for its most vulnerable populations.